July 16, 2007
Basel Chairman Outlines Advantages of Basel II Capital Framework
The Basel II capital framework should help firms and financial systems become more resilient to a rapidly changing financial landscape, said Nout Wellink, chairman of the Basel Committee on Banking Supervision and president of the Netherlands Bank. In a speech before the Risk Capital 2007 conference in Paris on June 27, Wellink said Basel II will help strengthen risk management practices in such areas as operational risk measurement and management, firm-wide stress testing, and the measurement of increasingly complex counterparty exposures. He also said that Basel II should "raise the bar on the quality of disclosures, especially related to more complex credit risk intermediation activities, covering areas such as counterparty risk, securitizations and credit risk mitigants." He also stressed that the capital framework should make it easier for both banks and regulators to consistently accommodate financial innovation.